Paper 1: Fundamentals of Securities and Futures Regulation

What this paper covers

This is a Regulatory Paper — what the SFC Guidelines on Competence calls a Local Regulatory Framework Paper (LRP). It tests Hong Kong regulation, the licensing regime and compliance obligations.

Questions	60 multiple-choice
Time	90 minutes
Pass mark	70%
Delivery	Computer-based (CBE), in English or Traditional Chinese

Syllabus areas

• HK Three-Tier Banking System
• HKMA Roles and Functions
• SFC Roles, Functions and Enforcement
• Insurance Authority and MPFA Roles
• HKEX Market Structure and Inter-Regulator Cooperation

A summary of the main areas. Chapter structure and question weighting follow the latest HKSI Institute study material.

Who needs this paper?

Licensed representatives for these regulated activities must pass it:

• Type 1: Dealing in securities (Local Regulatory Framework Paper)
• Type 2: Dealing in futures contracts (Local Regulatory Framework Paper)
• Type 4: Advising on securities (Local Regulatory Framework Paper)
• Type 5: Advising on futures contracts (Local Regulatory Framework Paper)
• Type 6: Advising on corporate finance (Local Regulatory Framework Paper)
• Type 8: Securities margin financing (Local Regulatory Framework Paper)
• Type 9: Asset management (Local Regulatory Framework Paper)
• Type 10: Providing credit rating services (Local Regulatory Framework Paper)
• Type 11: Dealing in / advising on OTC derivatives (Local Regulatory Framework Paper) — pending commencement of the new regime
• Type 12: Client clearing for OTC derivatives (Local Regulatory Framework Paper) — pending commencement of the new regime
• Type 13: Depositary services for relevant CIS (Local Regulatory Framework Paper)

Full RA mapping and exemption rules: the complete SFC LE guide.

How to study for it

Regulatory papers reward precision on statutory wording, definitions and exceptions. Skim the HKSI study material's chapter outline first to build a classification framework, then use practice questions to test your recall of the detail. The matching practical paper covers the same ground from the other side — study them against each other.

At 60 questions in 90 minutes you have roughly 90 seconds per question — practise under timed conditions.